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New Delhi, 8 November 2023
Vision@2047
CONSTRAINTS NEED ATTENTION
By Dhurjati Mukherjee
It is understood that the Vision@2047 document, likely
to be released by the government by year-end, will outline the structural
changes and reforms needed to reach the objective of becoming a $30 trillion
developed economy by that year, Niti Aayog CEO, BVR Subrahmanyam, stated
recently. The talk of India emerging big has been in the air for the last five-six
years or perhaps more, but the specific target of reaching $30 trillion has
gained momentum, specially after the pandemic.
Reports indicate that India’s nominal GDP will rise
from $3.4 trillion in 2022 to $7.3 trillion by 2030. Going by the preliminary
figures of the Niti Aayog, estimates show that India will need to post an
annual average economic growth of around 9 percent between 2030 and 2047.
Meanwhile, consultations with top corporates are slated to take place this
month as also with secretaries of the government so that the document could be
finalised by December end.
One may recall a statement released by the Aayog
released earlier this year which stated: “This rapid pace of economic expansion
would result in the size of the Indian GDP exceeding Japanese GDP by 2030,
making India the second largest economy in the Asia-Pacific region. By 2022,
the size of the Indian GDP had already become largest than the GDP of the UK
and also France. By 2030, India’s GDP is also forecast to surpass Germany”.
Further recall that a few years back, the government
announced achieving a $5 trillion economy by 2024, which appears unachievable.
Even achieving a $10 trillion economy by the year 2035 may not be possible due
to various problems that India faces. Survey and reports hardly outline this
possibility. However, what is important for the onward march is to involve the States
in this goal and ask them, specially the major ones like Tamil Nadu,
Maharashtra, Gujarat and Karnataka to formulate their own plans in this
regard.
The question that strikes our mind is what would be the
contribution of say the lower 40 percent of the population in the phenomenal
growth of the GDP that is being contemplated? Or say what would be the
contribution of the rural population in this targeted growth? Obviously, if the
corporate houses expand their profitability to reach the targets, this does not
mean inclusive growth.
It is not known what the planners and economists, who
advise the government, are thinking about the bottom tiers of the population,
which struggle for existence with their meagre earnings. What plans are being
contemplated by the government to increase their earnings and whether this
would find a place in the vision document?
Meanwhile, it may be pertinent to point out here that
the savings growth rate in the country declined to 47-year low and
indiscriminate personal loans given by banks has industry starved of funds.
This was reflected in the September bulletin of the Reserve Bank of India which
showed a “23 percent spike in gold loans and a 29 percent spike in personal
loans”. In this connection it is also pertinent to refer to the fact that the
financial liabilities have risen from 4.1 percent to 5.8 percent.
As a consequence, the net financial assets of
households in 2022-23 were 5.1 percent of GDP, considerably lower than the
historical average of 7.5 percent. These are quote reflective of the inability
of the people to save as their earnings have not kept pace with market trends
while borrowings have increased, not just from banks but also from private
money lending organisations, which have increased in recent
years.
Another aspect of the economic scenario is a recent
report indicating that unemployment in the country crossed 10 percent in
October, as per figures released by the Centre for Monitoring Indian Economy
(CMIE). It found that the unemployment rate in October was 10.05 percent with
the rural sector rate being 10.82 percent while the urban rate 8.44 percent.
This is more than the overall rate in September being 7.09 percent while last
year, the figure for October was 7.6 percent. In such a scenario, with
the present supplementary grant of Rs 28,000 crore, the allocation for the
NREGA programmes is the lowest in the last four years.
The problems facing the country as also the external
scenario is not at all congenial to high growth. The government retains its
pro-poor focus with little concern for the revival of the rural economy. Though
entrepreneurship has grown, this is mainly concentred in cities and
comprehensive rural transformation has not been attempted.
The potential of agriculture has not been explored
fully and though value addition has taken place, to some extent, this could
have increased several times more. Recently, Prime Minister Modi stated that
agro processing sector has attracted Rs 50,000 crore of foreign direct
investment (FDI) during the last nine years and if this trend continues, India
would eventually become a key player in processed food.
The labour-intensive sectors have not been given the
push and subsidies are not forthcoming. There is no government plan to identify
these sectors and promote India’s handloom and handicrafts in a big way
globally. It is only the big business, the big agricultural farmer and the
organised sector employees who have benefited from the policies of the present
government during the last few years.
The policy focus in the coming years has rightly been
given on physical infrastructure development but the same priority must be
given on social infrastructure i.e., on education and health sectors. Each
sub-division should have at least two higher secondary school and one or two
college while at the block and sub-divisional levels, health centres should be
upgraded. In the process of making these a reality, the panchayats have to be
given more responsibility and the 16th Finance Commission, which is
to be set up shortly, should, if possible, make provisions for the States to
allocate Central funds directly to the municipalities and panchayat bodies.
These must be incorporated in the vision document as
without a grass-root approach, India cannot prosper. Only measuring percent
growth of GDP, without taking into account the growth in income of the rural
populace, no inclusive development can take place. The needs and aspirations of
the masses must be given a serious thought and prioritised.---INFA
(Copyright, India News & Feature Alliance)
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